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Monday, December 6, 2021

Nzimande places higher education DG under precautionary suspension following forensic investigation into the National Skills Fund

The Director-General (DG) of the Department of Higher Education and Training, Gwebinkundla Qonde has been placed under precautionary suspension by the Minister of Higher Education, Science and Innovation, Dr Blade Nzimande following a disclaimer audit opinion by the Auditor-General of South Africa (AGSA).

Nzimande said precautionary suspension is placed following forensic investigations into the National Skills fund.

In May, Brigade Mkhuleko Hlengwa who is Chairperson of the Standing Committee on Public Accounts (SCOPA) and the National Chairperson of the IFP Youth Brigade Mkhuleko Hlengwa held a meeting in the form of hearing to learn about the state of affairs of the National Skills Fund (NSF).

According to the minutes of the meeting, the committee was concerned that in the most recent audit by the AG, the AG the said she was “unable to express an opinion as to the financial state of the NSF given that many of its invoices were not deemed to be sufficient proof of the expenditure of public funds”.

The Public Finance Management Act states that when an auditor issues a disclaimer of opinion report, it means that they are distancing themselves from providing any opinion at all related to the financial statements.

In attendance of the SCOPA meeting was the NSF CEO Mvuyisi Macikama, Nzimande and Qonde.

The point of the meeting was to discuss the deteriorating audit outcomes over the past three years and, according to the minutes, the committee said it “did not find the responses [from the higher education department] to be satisfactory” and wanted to know who the minister would hold to account and what he (the minister) would do and the committee called for a forensic investigation into the NSF.

Nzimande said he has been concerned about the deteriorating state of affairs at the NSF for some time now, as evidenced by the progressively worse audit outcomes over the last few years.

“If one only looks at the AG findings in its 2019/20 audit opinion, it is significantly different to the qualified audit opinion of the previous year. The AG is saying that the NSF has failed in its duty to keep records evidencing its skills development expenditure,” said Nzimande.

Adding that, “AGSA is saying is that the NSF has failed in its duty to keep records evidencing its skills development expenditure”.

Without this evidence, “… AGSA is saying that it cannot express an opinion on the financial statements of the NSF, and is thus unable to give an audit assurance that the NSF skills development expenditure was regular.

“More seriously, AGSA is saying that it cannot say that the money was spent for what it was allocated. This is a very serious finding which he takes seriously,” said the minister.

Following this May meeting, Nzimande released a statement last Friday that Qonde has been suspended with immediate effect.

Qonde is one of the longest-serving DGs in government as he has been in charge of the department after the split of the department of education into two; basic education and higher education, more than 10 years ago.

In his defense, Qonde told the committee that he was unable to present some of the evidence required by AGSA “only because this information had never before been collected by NSF”.

He said a lack of capacity was a major issue the AG raised the previous year.

The NSF has human resource capacity issues in various areas. He said the AG report also raised the lack of capacity regarding NSF operations as an issue.

“The management of the NSF as constituted under the accounting officer has a few executive positions, one of which is the CFO.

“The previous CFO resigned at the end of December. The new CFO has just come into the office and has been there for about a month or so,” said Qonde.

The DG also added that the NSF also finds it difficult to monitor third party service providers hired by NSF-funded are Technical Vocational Education and Training (TVET) colleges.

“The third parties are appointed by the TVET colleges and not the NSF.

“This is what the AG is picking up on. This is why, amongst other things, a complete review of the NSF’s standard operating procedures [is necessary], so that the gaps that exist in monitoring and accountability are tightened up,” said Qonde.

Adding that going forward, the AG also indicated that there would now be the requirement not only to have the School Development Plans (SDP) invoices it receives as proof for payment but also the underlying third-party source documents.

“These would now be required to be held on the premises of NSF. We now need these underlying documents in order to obtain an unqualified audit,” he added.

Qonde said it was important to note that he is not the accounting officer of NSF but that he is the accounting officer of the the department of higher education and training.

According to some media reports, Qonde has alleged that Nzimande has mistreated him and frustrated his efforts to do his job and said he must not be suspended. Adding that his efforts to address the audit outcomes had been thwarted by Nzimande.

Nzimande said the DG’s suspension is in terms of the Public Service Act and the SMS handbook, in the wake of a disclaimer audit opinion by the Auditor-General of South Africa (AGSA).

He said Dr Phil Mjwara was appointed following Qonde’s precautionary suspension and will serve as acting DG until the conclusion of the investigations and any process that may ensue thereafter.

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